Milk-feed ratio pulls back

Climbing feed cost dealt the milk-feed price ratio another blow. In November, the ratio fell 0.19 points to 2.34, according to the USDA’s announcement of feed-price ratios on Nov. 30. That’s also 1.11 points less than a year ago.

Corn and soybean prices pushed higher in November. The corn price used to calculate the ratio increased 58 cents to $3.12 per bushel. Soybeans increased 63 cents to $6.15 per bushel. However, the price of baled alfalfa hay fell $3 to $109 per ton. In comparison, year-ago prices for corn and soybeans were $1.77 and $5.62, respectively. Baled alfalfa hay was $98.30 per ton.

The all-milk price used to calculate the ratio also advanced during November. It tacked on 30 cents, which put it at $13.80 per hundredweight. However, that is still $1.30 less than a year ago.

The USDA revised the October milk-feed ratio, increasing it from 2.42 to 2.53. The October all-milk, corn and soybean prices also were revised. The October all-milk price increased 20 cents to $13.50 per hundredweight. Corn fell 18 cents, which put it at $2.54. However, soybeans saw a 6-cent gain, which put that price at $5.52 per bushel. Baled alfalfa hay was unchanged at $112 per ton.

The milk-feed ratio represents the pounds of 16-percent mixed dairy feed equal in value to 1 pound of whole milk. Therefore, with a 2.34 ratio in November, a dairy producer could buy 2.34 pounds of feed for every 1 pound of milk sold.

Whenever the ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk.